Welcome to the exciting world of ERISA! This blog is written by attorneys Kate MacKinnon and Sarah Demers at the Law Office of Katherine L. MacKinnon. Here, we'll talk about ERISA: updates on employee benefit law, information we hope people who have been denied benefits will find helpful, and any news or tidbits we think should be shared with the world.

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Wednesday, January 8, 2014

Word to the Wise : When is investment advice subject to a fiduciary standard?

The article discusses how ERISA holds that people advising employees/retirees on investment accounts are held to a fiduciary standard - meaning they have to put the interests of the client first before their own. However, when is advice really investment advice, and when is it not? Since this is narrowly defined in ERISA, often advice does not meet the criteria of "investment advice", and therefore the advisor is not held to the standard of a fiduciary.

Moral of the story: be careful and do your own research when someone from your financial institution gives you advice or information. It may not always be what is in your own personal best interest - and the advisor does not always need to tell you the motivation behind their advice.